Hair follicles are complex organs composed of the dermal papilla (DP), dermal sheath (DS), outer root sheath (ORS), inner root sheath (IRS) and hair shaft. Development of hair follicles begins towards the end of the first trimester of pregnancy and is controlled by epidermal–mesenchymal interaction (EMI), which is a signaling cascade between epidermal and mesenchymal cell populations. Hair grows in cycles of various phases. Specifically, anagen is the growth phase, catagen is the involuting or regressing phase and telogen is the resting or quiescent phase. Alopecia is not life threatening, but alopecia often causes severe mental stress. In addition, the number of individuals afflicted by alopecia patients has been increasing steadily. Currently there are two methods employed to treat alopecia, drug or natural substance therapy and human hair transplantation. Although drug or natural substance therapy may retard the progress of alopecia or prevent future hair loss, it may also accelerate hair loss when the medication is stopped after prolonged use. Conversely, the transplantation of human hair involves taking plugs of natural hair from areas in which occipital hair is growing and transplanting them to bald areas. However, the number of hairs that can be transplanted is limited in that only three such operations can generally be performed. To overcome such problems, many researchers have attempted to revive hair follicles by culturing hair follicle cells or mesenchymal cells in vitro and then implanting them in the treatment area.